In addition, the portfolio standard for each provider would have to require the following:
-- That of the total amount of electricity the provider was required to generate or acquire from renewable energy systems during each calendar year, at least 5% would be generated or acquired from solar renewable energy systems.
-- That any biomass combustion the provider used to meet the portfolio standard met the best available control technologies for emissions, with preference being given for gasified biomass technologies.
If a provider acquired electricity from a renewable energy system under a renewable energy contract with another party, the portfolio standard would have to require that contract to provide for both of the following:
-- That the term of the renewable energy contract was at least 10 years, unless the other party agreed to a contract with a shorter term.
-- That the terms and conditions of the contract were just and reasonable, as determined by the PSC.
If, for the benefit of one or more of its retail customers in Michigan, the provider had subsidized, in whole or in part, the acquisition or installation of a solar thermal energy system that qualified as a renewable energy system and reduced the consumption of electricity, the total reduction in the consumption during each calendar year that resulted from the solar thermal energy system would be considered electricity that the provider generated or acquired from a renewable energy system for the purposes of complying with its portfolio standard.
("Provider" would mean any person or entity in the business of selling electricity to retail customers in this State. "Portfolio standard" would mean a portfolio standard for renewable energy established by the Commission under the proposed act. "Renewable energy" would mean biomass; geothermal energy; solar thermal energy; or wind energy. "Biomass" would mean cellulosic organic material from a plant that is planted to produce energy or nonhazardous plant matter waste material that is segregated from other waste materials and is derived from any of the following: an agricultural crop, crop byproduct, or residue resource; gasified animal wastes; landfill methane; or waste such as landscape or right-of-way tree trimmings, excluding the following:
-- Municipal solid waste.
-- Recyclable postconsumer waste paper.
-- Painted, treated, or pressurized wood.
-- Construction debris.
-- Wood contaminated with plastic or metals.
-- Tires.
"Renewable energy system" would mean a facility or energy system that used renewable energy to generate electricity and transmitted or distributed the electricity that it generated from renewable energy, or a solar thermal energy system that reduced the consumption of electricity.
"Renewable energy contract" would mean a contract to acquire electricity from one or more renewable energy systems owned, operated, or controlled by third parties. "Terms and conditions" would include the price that an electric service provider was to pay to acquire electricity under a renewable energy contract.)
Renewable Energy Credits, Contracts
The PSC could establish a system of renewable energy credits that a provider could use to comply with its portfolio standard.
If a provider were unable to comply with its portfolio standard through the generation of electricity from its own renewable energy systems or the use of renewable energy credits, the provider would have acquire electricity under one or more renewable energy contracts.
The Commission would have to determine whether the terms and conditions of a renewable energy contract were just and reasonable.
Portfolio Standard Exemption
If the PSC determined that there was not or would not be a sufficient supply of electricity made available to a provider under renewable energy contracts with just and reasonable terms and conditions, it would have to exempt the provider, for that calendar year, from the remaining requirements of its portfolio standard or from any appropriate portion of the standard.
Annual Report
Each electric service provider would have to submit to the PSC an annual report that provided information relating to the actions the provider took to comply with the portfolio standard.
Each provider would have to submit the report after the end of each calendar year in a format approved by, and within the time prescribed by, the PSC. Each report would have to include all of the following information:
-- The amount of electricity that the provider generated or acquired from renewable energy systems during the reporting period and the amount of renewable energy credits that the provider acquired, sold, or traded during the reporting period to comply with its portfolio standard.
-- The capacity of each renewable energy system owned, operated, or controlled by the provider, the total amount of electricity generated by each system during the reporting period, and the percentage of that total amount that was generated directly from renewable energy.
-- Whether, during the reporting period, the provider began construction on, acquired, or placed into operation any renewable energy system.
-- Any other information that the PSC required.
Penalties
If a utility did not meet its portfolio standard as required, the PSC would have to impose on the provider a fine of $55 per megawatt hour for each renewable energy credit that the provider did not generate or acquire from a renewable energy system during a calendar year in violation of its portfolio standard.
The PSC annually would have to adjust the fines that would be imposed for each calendar year using the prevailing consumer price index for the Detroit region.
If the PSC imposed a fine against a provider, all of the following would apply:
-- The fine would not be a cost of service to the provider.
-- The provider could not include any portion of the fine in any application for a rate adjustment or rate increase.
-- The PSC could not allow the provider to recover any portion of the fine from its retail customers.
Money resulting from any fines imposed on a provider would have to go into a public benefits fund, which the bill would create within the State Treasury. Money in the fund at the close of the fiscal year would remain in the fund and would not lapse to the General Fund. The PSC would have to spend money from the fund, upon appropriation, to promote and "grow" renewable energy generation in Michigan.
Legislative Analyst: Julie Cassidy
FISCAL IMPACT
The bill would increase the administrative responsibility of the Public Service Commission; however, any additional costs would be covered through existing revenue. The bill also would require the PSC to impose fines for noncompliance. The amount of revenue generated would depend on the frequency and level of the fines. The bill would require this fine revenue be deposited into a new public benefits fund. Revenue in this fund would not lapse to the General Fund and would be used to promote renewable energy generation.
Fiscal Analyst: Elizabeth Pratt
Maria Tyszkiewicz
Analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent. sb385/0708 |
